Axa Equitable Life Insurance Company's Structured Capital Strategies variable annuity has surpassed the $1bn mark in new sales since the product was introduced in October 2010.
"We developed Structured Capital Strategies in response to investors' heightened fear of market risk," said Nick Lane, president of the retirement savings division at Axa Equitable. "It is resonating with people who, after the market tumult of the last few years, have a need for investment growth potential but are understandably risk averse and want some protection against market loss."
Structured Capital Strategies offers one, three and five-year participation in the performance of a number of underlying indices, up to a cap - called the performance cap rate - with a choice of downside buffers.
The indices featured in the range are the S&P500 Price Return Index, the Russell2000 Price Return Index, the MSCI EAFE Price Return Index, the London Gold Market Fixing Ltd. PM Fix Price/USD (gold index), and the NYMEX West Texas Intermediate Crude Oil Generic Front Month Futures (oil index).
Axa Equitable will absorb the first -10%, -20% or -30% of loss in the event of negative index performance, depending on the selected index and duration.
Together, the downside buffer and cap help to stabilise the impact of volatility. The performance cap rate is the maximum potential "ceiling" or cap that a contract holder may receive from index gains.